Technology

Commerce Dept warns factories vulnerable to shutdowns over computer chip shortage

The Commerce Department in a report issued Tuesday highlighted the severity of the computer chip shortage, saying the current supply shortage could lead to closures at manufacturing facilities if not properly addressed.

The department delivered results from a Request for Information (RFI) survey that provided insight from semiconductor producers and companies on the status of the computer chip supply chain.

“For the semiconductor products that present the greatest challenge to acquire, the median inventory for consumers who responded to the RFI has fallen from 40 days in 2019 to less than 5 days in 2021,” the department said in a summary of its findings, noting that supply may be even smaller in key industries.

“This means a disruption overseas, which might shut down a semiconductor plant for 2-3 weeks, has the potential to disable a manufacturing facility and furlough workers in the United States if that facility only has 3-5 days of inventory,” the department added.

The Commerce Department noted there was a “major supply and demand mismatch” because companies were not seeing a growth in supply for computer chips, while median demand could be as much as 17 percent higher in 2021 than it was in 2019. 

“The main bottleneck identified is the need for additional fab capacity. In addition, companies identified material and assembly, test, and packaging capacity as bottlenecks,” the department noted.

Companies said they have experienced supply chain issues with analog chips, used in devices such as radios; legacy logic chips, used in cars and medical decides; and optoelectronics chips, used for things such as switches and sensors.

Commerce Secretary Gina Raimondo took the opportunity to push Congress for billions of dollars in funding to tackle semiconductor production.

“The semiconductor supply chain remains fragile, and it is essential that Congress pass chips funding as soon as possible,” Raimondo said in a statement. “With sky-rocketing demand and full utilization of existing manufacturing facilities, it’s clear the only solution to solve this crisis in the long-term is to rebuild our domestic manufacturing capabilities.”

“President Biden has proposed $52 billion to revitalize our domestic semiconductor industry, and every day we wait on this funding is a day we fall further behind. But if we address this problem, we can create good jobs, rebuild American manufacturing, and strengthen our supply chains here at home for years ahead,” she added. 

Tags chip shortage Commerce Department Gina Raimondo Gina Raimondo Joe Biden

Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Regular the hill posts

People – Image widget – Person – Main Area Top

File - A Chevrolet Bolt is displayed at the Philadelphia Auto Show, Jan. 27, 2023, in Philadelphia. Electric vehicles are far less reliable than gasoline-powered cars, trucks and SUVs, mainly because most automakers are still learning how to build a completely new power system, according to this year's auto reliability survey by Consumer Reports.(AP Photo/Matt Rourke, File)
File - A Chevrolet Bolt is displayed at the Philadelphia Auto Show, Jan. 27, 2023, in Philadelphia. Electric vehicles are far less reliable than gasoline-powered cars, trucks and SUVs, mainly because most automakers are still learning how to build a completely new power system, according to this year's auto reliability survey by Consumer Reports.(AP Photo/Matt Rourke, File)

QAT WC-2613

More Technology News

See All

People – Image – Person

In this photo released by the Governor of Sevastopol, Mikhail Razvozhayev telegram channel, a rescuer gestures as he helps people during an evacuation after storm and flooding in Sevastopol, Crimea, Monday, Nov. 27, 2023. A storm in the Black Sea took down power grids and left almost half a million people without power after it flooded roads, ripped up trees and damaged buildings in Crimea, Russian state news agency Tass said. (Governor of Sevastopol Mikhail Razvozhayev's telegram channel via AP)
In this photo released by the Governor of Sevastopol, Mikhail Razvozhayev telegram channel, a rescuer gestures as he helps people during an evacuation after storm and flooding in Sevastopol, Crimea, Monday, Nov. 27, 2023. A storm in the Black Sea took down power grids and left almost half a million people without power after it flooded roads, ripped up trees and damaged buildings in Crimea, Russian state news agency Tass said. (Governor of Sevastopol Mikhail Razvozhayev's telegram channel via AP)

People - Video Bin - Person

The White House is pushing 'Bidenomics,' but what does it mean?

The White House is pushing 'Bidenomics,' but what ...
DC Bureau: AI Legal Immunity (raquel)
KXAN: special session
DC Bureau: Biden economic display (basil)
KTXL: ca budget folo
WHTM: good gov bills
More Videos

Main area middle

main area bottom custom html

MAIN Area bottom

People – Custom HTML – Person

MAIN AREA BOTTOM

People - Article Bin - 7 Headline List with Featured Image - Person

Main area bottom